Daily Energy Market Update 6-9-2025

Liquidity’s Daily Market Overview

Energies are higher as U.S. and Chinese representatives are set to resume trade talks today in London. "Steady" and "stable" are the watchwords of the day for the crude market in news wire commentaries. 

The U.S. Press Secretary said on Sunday that the London talks would focus on moving forward with the Geneva agreement, noting the two sides’ strategic interests in each other’s markets. Analysts say the Monday talks are unlikely to make much progress in resolving disagreements and sector-specific tariffs targeting a range of strategic industries, ranging from technology and critical minerals to manufacturing and agriculture. “It’s much, much more than just about trade and what’s going on in that domain between the two countries. It’s about how they run their economies.", as per one economist. One asset manager added :" it could take months for trade tensions to be resolved."   (CNBC)

China’s crude oil imports fell in May to their lowest daily rate in four months, data showed on Monday, as planned maintenance work at both state-owned and independent refiners picked up. May's imports were seen at a rate of 10.97 MMBPD, down 3% from April, but only down 0.78% year on year. In the first five months of 2025, China imported 11.1 million bpd, up 0.3% from the same period a year earlier.  "May is typically the peak maintenance season in China", as per one analyst cited by Reuters.  “In addition, crude prices were relatively high earlier, so long-term contract volumes, especially from Saudi Arabia, were significantly cut back. On top of that, Iranian oil arrivals were very low in May, which made overall seaborne imports quite weak.” However, imports are expected to rebound in June. Monday's data also showed China's refined fuel exports fell 17.62% in May. (LSEG)

China’s exports growth missed expectations in May, dragged down by a sharp decline in shipments to the U.S., with analysts saying effects of the Beijing-Washington trade truce will be visible in June data. Chinese exports to the U.S. plunged 34.5% from a year ago, marking the sharpest drop since February 2020. Overall exports rose 4.8% last month in U.S. dollar terms from a year earlier, customs data showed Monday, shy of Reuters’ poll estimates of a 5% jump. The export growth was the slowest in 3 months. The pace of exports thus slowed from April's increase of 8.1%. Imports fell 3.4% in May from a year earlier, a drastic drop compared to economists’ expectations of a 0.9% fall. Imports had been declining this year, largely owed to sluggish domestic demand. (CNBC)

The Baker Hughes oil rig count issued Friday showed a decrease of 9 units. But, this was a result of reclassification of rigs by the oil services company. The North America report has been updated to reflect corrected Oil/Gas classifications in the Marcellus and Utica basins, effective April 4, 2025, Baker Hughes wrote. This update reclassified approximately 8 to 10 land rigs. The reclassification reduced the number of oil rigs by 10 and added 10 to the number of gas rigs. (Baker Hughes/WSJ)

Money managers added a lot of length in WTI, while reducing their positions in RB & ULSD slightly. WTI combined length in futures/options on ICE/CME rose by 39,598 contracts in the week ended Tuesday June 3, as per Friday's CFTC report. This was a result of longs added together with shorts reduced on the CME. The crude positioning was the largest weekly net length increase since early January. Buying in ICE Brent was more modest, with speculators purchasing 8,813 lots. (ING) RB net length fell by 1,472 contracts and that for ULSD fell by 2,482 contracts. 

The spread between WTI and Brent crude futures narrowed to its tightest level since September 2023 on Friday as U.S. prices rose on a sliding rig count and Canadian wildfires that cut supplies, analysts and traders said. The spread between the two crude benchmarks narrowed to as little as $2.78 a barrel during the session on Friday. A discount of $4 per barrel is typically considered the level that encourages U.S. exports to Europe, as traders see an open arbitrage route. The tighter spread can act as an early indicator that U.S. crude exports will likely fall in the next few weeks, assuming the premium for Brent crude remains weak. The inclusion of WTI-Midland crude in the dated Brent index has meant that the spread between the two is increasingly correlated to freight rates, as the price of Dated Brent is set by WTI Midland on many trading days.(Reuters)

Today's U.S. national retail gasoline price, as per AAA data, is $3.124. This is the lowest price seen since March 20th.

Energy Market Technicals

Price action and momentum remain positive, as WTI spot futures have risen to their best value since April 22.

Technically WTI has a mean reversion after settling over the DC chart's upper bollinger band. The band intersects currently at 64.89. Resistance for the spot futures comes in at 65.09,which was almost tested with today's high of 65.04. Above this resistance is seen at 66.88-66.90. Support lies at 63.98-64.05 via the July 60 minute chart. Next support comes in at 62.75-62.82.

Natural Gas Market Overview

Natural Gas--NG is down 6.0 cents
NG is lower as overall national weather demand says heat remains elusive. Yet, demand is running over the 5 year average, as per Bloomberg data, even as the 15 day CDD count fell slightly overnight. Feed gas volumes to the LNG export plants are still "curtailed". 

Demand remains above the previous five-year average around 68 BCF/d for the time of year, as per Bloomberg data.  The GFS 6z 15day has fallen just over 6 CDDs nationally. Dallas this week will see highs 14 to 16 degrees below normal. Chicago during the course of the next 14 days will see highs 3 to 10 degrees below normal, except for one day of +6 degrees. Atlanta will see highs 3 to 8 degrees below normal.

Feed gas deliveries at U.S. LNG export facilities continue to flow at some of the lowest levels in months as maintenance work continued and periodic outages cut into demand. (NGI) Bloomberg puts volume at 13.59 BCF/d, compared to pre maintenance levels as high as 16.7 BCF/d due to ongoing outages at Sabine Pass and Cameron. 

The Baker Hughes gas rig count showed a increase of 5 units. But the increase was a function of a reclassification. The reclassification reduced the number of oil rigs by 10 and added 10 to the number of gas rigs. (WSJ)

Some shortcovering by money managers occurred in the week ended Tuesday June 3, as per Friday's CFTC report. Money managers added more longs than shorts in the report. Thus, net shorts fell by 10,776 contracts to a total of 52,765 contracts.

Chinese data seen today showed that natural gas imports - including piped gas and LNG - fell 10.8% on the year to 10.11 million tons. Imports of spot LNG remained weak as Asian prices hovered above $11/mmBtu, a level deemed too expensive for Chinese buyers given ample domestic supplies and weaker-than-expected industrial consumption of the fuel, traders
have said. (LESG) Asian spot natural gas prices eased slightly this past week, slipping for the first time in five weeks, as weak demand in the region weighed on prices, Reuters reports.

Technically momentum basis the DC chart is poised to turn downward. Resistance above lies at 3.815-3.817 and then at 3.930-3.939. Support comes in at 3.608-3.613 and then at 3.527-3.531. The 100 day moving average on the DC chart intersects at 3.694.

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Disclaimer

This article and its contents are provided for informational purposes only and are not intended as an offer or solicitation for the purchase or sale of any commodity, futures contract, option contract, or other transaction. Although any statements of fact have been obtained from and are based on sources that the Firm believes to be reliable, we do not guarantee their accuracy, and any such information may be incomplete or condensed.

Commodity trading involves risks, and you should fully understand those risks prior to trading. Liquidity Energy LLC and its affiliates assume no liability for the use of any information contained herein. Neither the information nor any opinion expressed shall be construed as an offer to buy or sell any futures or options on futures contracts. Information contained herein was obtained from sources believed to be reliable, but is not guaranteed as to its accuracy. Any opinions expressed herein are subject to change without notice, are that of the individual, and not necessarily the opinion of Liquidity Energy LLC